No matter what sort of business you are, there will undoubtedly be times when you are owed money by clients, which you may feel you have little hope of ever getting. While larger companies such as credit card providers may have their own in-house debt management systems, for most SMEs (and SMEs make up 99% of all UK private sector businesses, 59.3% of private sector employment and 48.1 % of private sector turnover), they will need to try and recover the debt themselves or outsource it.

Debt management is a big problem. In fact, figures from two years ago show that over 124,000 small and micro businesses said they were almost put out of business by late payments. This could be anything from a landlord whose tenant is in rent arrears, to a micro business that is owed money by a bigger supplier.

So, if you find that your business has unpaid debts that are causing a real concern, what can you do? After you have tried to recover the monies yourself (by telephoning and sending letters etc), you have a number of options.

  • Take legal action by going to court
  • Mediation/Alternative Dispute Resolution (ADR)
  • Sell the debt to a debt collection agency
  • Instruct a debt collection agency to pursue the recovery of the monies on your behalf.

Going To Court

For the first option, there is a step by step process described on the Government website. Do note that you will have to pay a fee to take someone to court which you will not get back. Also, taking someone to court does not guarantee that you will get the debt repaid to you.

For larger claims against a company (typically over £750), there may be cases where you can petition the court to liquidate the debtor. If your claim is against an individual and you can provide they are insolvent, then you can petition for their bankruptcy.


There are a number of mediation companies that aim to resolve the issue without incurring legal costs.

Sell The Debt

There are specialist debt collection services that will buy the debt from you. One such example is, who may buy the debt from you. They will then endeavour to collect the debt themselves. When you sell a debt, you cannot expect to get 100% of the value, but you may be of the mindset that any money is better than nothing, as well as getting some sort of closure on the matter.

Instruct A Debt Collection Agency

You can also instruct a debt collection agency to act on your behalf to get your unpaid monies. While there is no guarantee that they will get all or any of your monies back, often a letter or telephone call from a debt collection agency can be enough to get debtors to act.

If the debt collection agency does get all or some of your monies back, they will typically charge you a percentage of the amount as their fee. Other companies may charge an initial fee upfront in order to get the ball rolling, while yet others will do a combination of both.

As you can see, there are a number options open to you in trying to recover a debt. Which route you decide to go down will depend on your own circumstances, but hopefully this has given you some food for thought.